Key Takeaways
- Checkbox authority found on tax returns (e.g., Form 1040).
- Limited scope: Only for that specific return and tax year.
- Can discuss processing, math errors, and missing information.
- Automatically expires 1 year from the due date of the return.
- Cannot represent taxpayer or handle examination/collection matters.
- No separate form required—just check the box on the return.
Third-Party Designee: The Checkbox Authorization
Why This Matters for the Exam
Third-Party Designee is tested because it represents the most limited form of authorization. The exam tests whether you understand its narrow scope and automatic expiration.
Expect at least 1-2 questions distinguishing Third-Party Designee from Forms 2848 and 8821.
What Is a Third-Party Designee?
A Third-Party Designee is authorized by checking a box directly on a tax return (e.g., Form 1040, line "Third Party Designee"). This grants very limited authority for processing matters related to that specific return.
How It Works
- Taxpayer checks the box on the return (Form 1040, etc.).
- Enters designee's name and phone number.
- Creates a 5-digit PIN for the IRS to verify identity.
- Authority is automatically granted when the return is filed.
Scope of Authority: What the Designee CAN Do
| Authorized | Description |
|---|---|
| Discuss processing | Answer IRS questions about return status |
| Provide missing info | Supply missing data requested by IRS |
| Receive refund status | Check on refund processing |
| Address math errors | Discuss IRS-identified math errors |
| Receive copies of notices | Receive notices related to that return |
Scope of Authority: What the Designee CANNOT Do
| Not Authorized | Why |
|---|---|
| Represent taxpayer | Requires Form 2848 |
| Sign documents | Requires Form 2848 |
| Negotiate/Advocate | Requires Form 2848 |
| Handle audits | Requires Form 2848 |
| Handle collections | Requires Form 2848 |
| Receive confidential info beyond that return | Requires Form 2848 or 8821 |
Expiration
Automatic Expiration: The Third-Party Designee authorization expires 1 year from the due date of the return (without regard to extensions).
Example:
- 2024 Form 1040 due April 15, 2025.
- Third-Party Designee authority expires April 15, 2026.
Comparison: Third-Party Designee vs. Form 2848 vs. Form 8821
| Factor | Third-Party Designee | Form 8821 | Form 2848 |
|---|---|---|---|
| How Created | Checkbox on return | Separate form | Separate form |
| Scope | Processing only (1 return) | Receive info (multiple) | Full representation |
| Duration | 1 year from due date | Until revoked | Until revoked |
| Sign Documents | No | No | Yes (if authorized) |
| Represent | No | No | Yes |
| Who Can Be Named | Anyone | Anyone | Eligible practitioners |
Real-World Scenario
Scenario: You prepare a client's 2024 Form 1040. The client checks the "Third Party Designee" box with your name and phone number.
- What you can do: Answer IRS questions about the return processing, provide missing information, check refund status.
- What you cannot do: Handle an audit, represent the client in appeals, sign any documents.
- When it expires: April 15, 2026 (1 year from the 2024 return due date).
If the client gets audited, you'll need a Form 2848 to represent them.
On the Exam
Expect 1-2 questions on Third-Party Designee, typically:
- Expiration Questions: "When does Third-Party Designee authority expire?"
- Scope Questions: "What can a Third-Party Designee do?"
- Comparison Questions: "What is the difference between Third-Party Designee and Form 2848?"
The key is to remember: Checkbox on return, processing only, 1 year expiration, no representation.
When does a Third-Party Designee authorization generally expire?
What can a Third-Party Designee do?
How is Third-Party Designee authority created?